Page 59 - UKRRptMay19

The Pearl of the Black Sea came in fourth, with 6.2mn tons, up 5%. Kherson enjoyed a 40% jump, handling almost 1mn tons. The two Azov ports saw declines: Mariupol down 5%, to 1.3mn tons, and Berdyansk, down 27%, to 261,000 tons.
Ship passenger traffic was up by one third during the first quarter, with 11,373 people traveling by boat to and from Odesa and Chornomorsk. The lion’s share – 76% -- traveled on UkrFerry’s Black Sea routes from Chornomorsk – to Poti and Batumi in Georgia and to Haydarpasa and Samsun in Turkey.
Ending Russian harassment of freighters going to Mariupol would boost cargo volumes by 15%, or 800,000 tons, Oleksander Oleniky, the port director, tells the centre for Transportation Strategies. Last May, Russia opened a highway bridge without a drawbridge. The Kerch Strait bridge is too low for one third of the freighters that historically serviced Mariupol port, the director says. One year later, the bridge pylons may be creating new currents and uncharted sandbars. Although regulations require passage of the Kerch Strait with a local pilot onboard, a 17,500-ton bulk carrier, the Maryland, ran aground in the Strait on March 14. Initially, it resisted the efforts of four tug boats to free it.
Exports of steel products through Mariupol were down 30%, to 455,000 tons, in January and February, compared to the same period last year. By contrast, at Mykolaiv, the Black Sea alternative for Mariupol’s steel mills, steel exports were up 20%, to 615,000 tons. Last year, Mariupol was the nation’s top steel exporting port, shipping out 4.1mn tons of steel. But last May, Russian border controls ships started harassing shippers in the Azov, causing some companies to stop serving Ukraine’s largest port on the Azov. At Kherson, a smaller Black Sea port closer to the Azov, cargo handling during the first two months of this year was up 27.5% y/y. From Mariupol, Kherson is 420 km, or seven hours by truck.
9.1.4 Construction & Real estate sector news
The Russian state-owned development bank VEB.RF (formerly Vneshtorgbank) announced it will buy a stake in one of Russia’s largest construction companies Mostotrest that is owned by stoligarch and president Vladimir Putin’s close personal friend billionaire Arkady Rotenberg.
The deal is bound to raise eyebrows as Rotenberg ahs grown wealthy on innumerous state contracts to construct major pieces of infrastructure. At the same time since VEB was taken over by Putin confident Igor Shuvalov the bank has been tasked with overseeing the massive state-sponsored investment programme into infrastructure where billions of dollars will be spent.
The size of the stake in Mostotrest is still under discussion and may be “more than a blocking stake”, as well as a significant stake in Alexey Krapivin Group of Companies 1520 (28.33%) and its partners, Vedomosti reported. VEB is prepared to buy from 30 to 49% in each of the companies, the paper said citing people close to the deals.
If the deal with Mostotrest goes through then VEB would become the major shareholder. Currently 94.2% of Mostotrest PJSC is owned by TFK-Finance, it is 100% owned by Stroyprojectholding LLC, which is owned by Rotenberg,
59 UKRAINE Country Report May 2019 www.intellinews.com